Washington State’s New Answer For Regulated Medical Marijuana: Get Ready Now

Washington legislators recently dropped a slew of bills to regulate medical marijuana and to harmonize it with Initiative 502, the state’s recreational cannabis law. For weeks now, no one has been able to predict which if any of these bills will emerge as the victor for overhauling medical cannabis in the Evergreen State. That changed though last week when Senate Bill 5052, the Cannabis Patient Protection Act, passed in the Senate by a 36-11 margin, giving it a good chance of making it through the House and eventually onto the Governor’s desk for signature into law.

The 58-page bill contains many, many regulations for the “new” medical, recreational marijuana hybrid industry, including the below highlights:

Creating the Washington State Liquor and Cannabis Board, which pretty much qualifies as the existing Liquor Board but with a new name.

Qualifying patient debilitating conditions will remain nominally the same as currently set forth in RCW 69.51A, but a limiting definition will be added to mandate that the condition must be “severe enough to significantly interfere with the patient’s activities of daily living and ability to function, which can be objectively assessed and evaluated. . . .”

In-person visits with health care providers will be required for patients to secure medical marijuana authorization cards and health care professionals will need to have a documented relationship with the patient as a principal care provider or specialist.

Existing I-502 retailers can apply to hold “medical marijuana endorsements” that will allow them to sell cannabis for medical use to qualifying patients and designated providers.

The Board must develop “a competitive, merit-based application process that includes, at minimum, the opportunity for an applicant to demonstrate experience and qualifications in the marijuana industry. Operating a collective garden before [application] and having a business license and a history of paying sales tax to the department of revenue may be factors used to establish the experience and qualifications of the applicant.”

The Board’s existing one thousand feet perimeter around schools, playgrounds, recreation centers, child care centers, parks, public transit centers, and arcades would still apply, and will apply with equal force to licensed businesses with medical marijuana endorsements.

Health care professionals will be required to enter the names of their qualifying patients into a centralized database that health care professionals, qualifying patients, retailers, and law enforcement would be able to access in limited ways, with unauthorized access to the database being a class C felony.

Qualifying patients could grow up to six plants at home (unless a health care professional specifically authorizes more up to a maximum of 15) and qualifying patient cooperative grows would be permitted for up to four patients (with a maximum of 60 plants) if they are at least 15 miles from a retail outlet and if everyone participating is in the foregoing qualifying patient registry. Only one cooperative garden would be allowed per tax parcel.

Collective gardens as they are currently structured under RCW 69.51A would be phased out by July 1, 2016.

Hardly a week goes by where one of our cannabis business lawyers does not get asked when the Liquor Control Board will reopen the licensing window for Initiative 502. Should the Cannabis Patient Protection Act become law, it looks like that window will be reopening relatively soon but with very strict requirements.

If marijuana producers want to cultivate marijuana for medical use to sell to retailers with medical marijuana endorsements, they must apply to the state to do so, and they must disclose the amount or percentage of plant canopy they will dedicate to cultivating cannabis for medical use. After these applications come in, the Board will consider increasing the overall plant canopy for current producers based on the amount of cannabis to be grown for retailers with medical marijuana endorsements. If current marijuana producers do not use all of the increased production space, the Board may reopen the license period for new marijuana producer license applicants, but only to those marijuana producers who agree to grow plants for marijuana retailers holding medical marijuana endorsements. Priority for licensing will be given to existing producer applicants who are not yet licensed and then will be given to “new producer applicants.”

The Board will also be given the power to reopen the licensing period for retailers if more distribution is needed to meet qualifying patient demand, among other certain factors listed in the Act.

We have on behalf of our clients filed countless licensing applications in various states that base their licensing decisions on merit, like Illinois, Nevada, and Minnesota and we know very well what states tend to look for in this sort of competitive situation. Based on that, we advise anyone currently operating an unlicensed marijuana business in Washington to start now to ensure that you are in a competitive position if and when the time comes for you to file your competitive application. For some of the specifics on what you should be doing now to prepare for that day, check out Cannabis Compliance Audits, Shoring up Your Cannabis Business With Audits and Cannabis Promises to Keep.

Since joining Harris Bricken in 2010, Hilary has earned a reputation as a fearless advocate for local businesses. Hilary’s clients—start-ups, entrepreneurs, and companies in all stages of development—value her bold approach to business strategy.

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About this Blog

The Canna Law Blog is a forum for discussion about the practical aspects of cannabis law and how it impacts those involved in this growing industry. We will provide insight into how canna businesspeople can use the law to their advantage…

Disclaimer

Please be mindful that possessing, using, distributing and selling marijuana are all federal crimes and that this blog is not intended to give you any legal advice, much less lead you to believe that marijuana is legal under federal law. Please also note that even though marijuana is illegal under federal law, you will need to pay federal taxes just as though you are a legal entity. This is true even if you are a state law not-for-profit entity.

The Canna Law Group is a team of business attorneys focusing on the corporate, compliance, intellectual property, and consumer product issues impacting the cannabis industry. We represent medical and recreational businesses in multiple states, and we continue to offer our clients the proactive approach and strategic edge that this unique industry demands.